Line the inside of an 8x4x2-inch loaf pan with plastic wrap; set aside. In a medium saucepan, combine water, sugar, and cranberries. Cook over medium heat until mixture just boils, stirring to dissolve sugar. Remove from heat. Cool slightly. Pour, half at a time, into a blender or food processor. Cover and blend or process until mixture is nearly smooth. Strain through a fine mesh sieve (should have 2 to 2-1/2 cups sieved cranberry mixture).
Pour sieved mixture into lined loaf pan. Cover and freeze for 2 hours or until mixture is nearly frozen. Stir well, scraping frozen mixture from sides of pan. Spread mixture evenly. Cover and freeze overnight.
To serve, let stand at room temperature for 5 to 10 minutes. Spoon into dessert cups or dishes. Makes 8 to 10 servings.